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Dominion files application for Virginia offshore wind project

Denmark's Orsted will act as EPC contractor for the $300m project, set to become just the second completed in US waters

US utility group Dominion Energy has formally filed for regulatory approval of its two-turbine, 12MW offshore wind demonstration project off the mid-Atlantic state of Virginia, with Denmark’s Orsted set to act as EPC contractor for the offshore portion.

Dominion confirms it expects the Coastal Virginia Offshore Wind Project to be on line by the end of 2020, which will allow the utility to analyse performance data for a year or two, before potentially building a much larger project in an adjacent zone by 2024.

If completed on time in 2020, the Virginia project is likely to become just the second US offshore wind farm in commercial operation, following Deepwater Wind’s 30MW Block Island project off Rhode Island.

Virginia regulators have three months to act on the application, with Dominion hoping to begin onshore construction by December.

Given the 6MW turbine size, and the fact that Alstom was formally a partner on the Virginia project, GE would appear to be the frontrunner for the turbine supply contract, though no deal has been formally announced. GE acquired Alstom’s offshore wind business as part of a broader deal in 2015.

Among the eye-catching details in Dominion’s application to Virginia’s State Corporation Commission is the project’s $300m price tag – a figure that includes transmission but not financing costs. For comparison, Deepwater Wind relied on a $290m package of project finance to build its more-than-twice-as-large Block Island.

But Virginia views the project as a research effort with the ability to unlock its offshore resources at much greater scale down the roads. Dominion holds the lease to an adjacent zone that could hold up to 2GW of future capacity.

Dominion will rate-base the demonstration project’s costs, and insists it will not raise customers' bills. However, the application ( PDF) notes Virginia will provide Dominion with the opportunity to earn an “enhanced rate of return”, as the state seeks to promote offshore wind development.

Dominion’s project will be built 27 miles (43km) off the coast of Virginia Beach, completely out of sight for those on the coast. The Block Island Wind Farm is located about 3 miles from Block Island itself, which is roughly 13 miles to the mainland.

Since then, however, the US offshore market has come into much clearer focus, with 1.4GW of capacity securing off-take deals in New England this year alone and New York set to follow with an 800MW request for proposals later this year.

That momentum has left a number of states scrambling to catch up, Virginia among them, out of fear of missing out on a coastal jobs and supply-chain bonanza in the 2020s.

Virginia's Hampton Roads region, which includes cities like Virginia Beach, Newport News and Norfolk, is known for its many shipyards and large military presence. The state believes the region is an excellent fit for for the future offshore wind supply chain.

Dominion, among the largest US investor-owned utility groups, with 26GW of generating capacity and thousands of miles of transmission lines and gas pipelines, announced its offshore application alongside Virginia Governor Ralph Northam, a pro-renewables Democrat.

New York to launch 800MW offshore solicitation in late 2018

“The offshore wind demonstration project will provide critical information to stakeholders and will position Virginia as a leader as we work to attract job opportunities in the offshore wind supply chain and service industries,” Northam says.

Earlier this year Dominion signed an EPC agreement with Orsted, while L.E. Myers and Mott MacDonald will handle the project’s onshore work.

For Orsted, the deal with Dominion offers the chance to be involved in a near-term US offshore project after being shut out of the trio of offshore tenders this year in New England, with Massachusetts, Rhode Island and Connecticut awarding their capacity to rival developers Vineyard Wind and Deepwater.

Orsted controls large zones south of Massachusetts and off the coast of New Jersey, with ample opportunity to secure off-take contracts over the next year or two.

“This project will provide us vital experience in constructing an offshore wind project in the United States and serve as a stepping stone to a larger commercial-scale partnership between our companies in the future,” says Thomas Brostom, president of Orsted North America.

Dominion’s application says the turbines will use 75-metre blades and monopile foundations. The power would connect to the shore at Camp Pendleton State Military Reservation, south of Virginia Beach.

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Dominion files application for Virginia offshore wind project

Dominion files application for Virginia offshore wind project

Denmark's Orsted will act as EPC contractor for the $300m project, set to become just the second completed in US waters

US utility group Dominion Energy has formally filed for regulatory approval of its two-turbine, 12MW offshore wind demonstration project off the mid-Atlantic state of Virginia, with Denmark’s Orsted set to act as EPC contractor for the offshore portion.

Dominion confirms it expects the Coastal Virginia Offshore Wind Project to be on line by the end of 2020, which will allow the utility to analyse performance data for a year or two, before potentially building a much larger project in an adjacent zone by 2024.

If completed on time in 2020, the Virginia project is likely to become just the second US offshore wind farm in commercial operation, following Deepwater Wind’s 30MW Block Island project off Rhode Island.

Virginia regulators have three months to act on the application, with Dominion hoping to begin onshore construction by December.

Given the 6MW turbine size, and the fact that Alstom was formally a partner on the Virginia project, GE would appear to be the frontrunner for the turbine supply contract, though no deal has been formally announced. GE acquired Alstom’s offshore wind business as part of a broader deal in 2015.

Among the eye-catching details in Dominion’s application to Virginia’s State Corporation Commission is the project’s $300m price tag – a figure that includes transmission but not financing costs. For comparison, Deepwater Wind relied on a $290m package of project finance to build its more-than-twice-as-large Block Island.

But Virginia views the project as a research effort with the ability to unlock its offshore resources at much greater scale down the roads. Dominion holds the lease to an adjacent zone that could hold up to 2GW of future capacity.

Dominion will rate-base the demonstration project’s costs, and insists it will not raise customers' bills. However, the application ( PDF) notes Virginia will provide Dominion with the opportunity to earn an “enhanced rate of return”, as the state seeks to promote offshore wind development.

Dominion’s project will be built 27 miles (43km) off the coast of Virginia Beach, completely out of sight for those on the coast. The Block Island Wind Farm is located about 3 miles from Block Island itself, which is roughly 13 miles to the mainland.

Since then, however, the US offshore market has come into much clearer focus, with 1.4GW of capacity securing off-take deals in New England this year alone and New York set to follow with an 800MW request for proposals later this year.

That momentum has left a number of states scrambling to catch up, Virginia among them, out of fear of missing out on a coastal jobs and supply-chain bonanza in the 2020s.

Virginia's Hampton Roads region, which includes cities like Virginia Beach, Newport News and Norfolk, is known for its many shipyards and large military presence. The state believes the region is an excellent fit for for the future offshore wind supply chain.

Dominion, among the largest US investor-owned utility groups, with 26GW of generating capacity and thousands of miles of transmission lines and gas pipelines, announced its offshore application alongside Virginia Governor Ralph Northam, a pro-renewables Democrat.

New York to launch 800MW offshore solicitation in late 2018

“The offshore wind demonstration project will provide critical information to stakeholders and will position Virginia as a leader as we work to attract job opportunities in the offshore wind supply chain and service industries,” Northam says.

Earlier this year Dominion signed an EPC agreement with Orsted, while L.E. Myers and Mott MacDonald will handle the project’s onshore work.

For Orsted, the deal with Dominion offers the chance to be involved in a near-term US offshore project after being shut out of the trio of offshore tenders this year in New England, with Massachusetts, Rhode Island and Connecticut awarding their capacity to rival developers Vineyard Wind and Deepwater.

Orsted controls large zones south of Massachusetts and off the coast of New Jersey, with ample opportunity to secure off-take contracts over the next year or two.

“This project will provide us vital experience in constructing an offshore wind project in the United States and serve as a stepping stone to a larger commercial-scale partnership between our companies in the future,” says Thomas Brostom, president of Orsted North America.

Dominion’s application says the turbines will use 75-metre blades and monopile foundations. The power would connect to the shore at Camp Pendleton State Military Reservation, south of Virginia Beach.

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